In order to accurately calculate and track your costs and profits on Amazon, you must be aware of the various fees associated with each transaction.
The Amazon referral fee, which is charged on each and every purchase, is a significant consideration. But what does this really mean?
Amazon charges a commission for each thing you sell on their website, and this is what we mean by a referral fee. In most cases, this cost amounts to around 15% of the final transaction price.
Keep in mind that this proportion might vary based on the type of goods you’re looking to purchase. Amazon Device Accessories can have a discount of up to 45 percent, while personal computers can have a discount of 8 percent.
The Amazon referral fee will be explained in full in this tutorial, including how the charge is calculated, who is responsible for paying it, and what happens when a discount code is used. Besides that, we’ll try to answer some common queries on the subject.
Is Amazon right to charge a referral fee for promoting its products?
For the most part, consumers are aware and agree that Amazon charging a tiny commission for referrals is just.
Some type of “referral fee” may be appropriate to anticipate when you refer your buddy to a person who is selling a home. It resembles a commission in many ways.
This is precisely like the Amazon Referral Fee, but instead of residences, it’s things on Amazon that are being referred.
Customers are flocking to your items since Amazon is a well-known and trustworthy platform, therefore it’s only fair that they get a little referral fee for their efforts.
Think about that for a moment. There is a good probability that you would have to spend upwards of $10,000 on marketing before you made any money selling your items on your own independent website.
As opposed to other ecommerce platforms, Amazon allows you to get results far more quickly.
To What Extent Is This Charge Determinated?
Amazon calculates the proportion of the total price paid by the consumer to establish the referral fee. In most cases, this amount is about 15%. So, for example, if you’re selling a $150 product for $120, Amazon would deduct the referral fee from $120 instead of $150 when calculating your commission.
Is There A Fee For Every Referral?
No matter what sort of account or fulfilment method you use, you must pay Amazon’s referral fee anyway. It doesn’t matter if you’re using a sophisticated selling strategy or a simple one.
You’ll have to pay a closing charge of $0.99 for every item you sell if you have an individual seller account. In addition to the referral fee, this set closing cost applies.
A monthly cost of $39.99 is required for the professional selling plan. With a professional seller account, you won’t have to pay a predetermined closing charge.
With a professional selling strategy, you’ll also have access to a wealth of useful tools and insights.
It’s worth upgrading to a professional selling plan if you’re selling at least 40 goods a month on Amazon because you’ll save a lot of money on fees, as well as benefit from management tools and volume listings.
Regardless of whether you’re selling the goods FBM (fulfilled by the merchant) or FBA (fulfilled by Amazon), you still have to pay the referral fee for shipping and delivery (fulfilled by Amazon).
A referral fee is calculated by taking the percentage of both the item’s selling price and its delivery cost into account.
This means that your ultimate referral income is 15 percent of $20 + $3.50 ($3.53) if you sell a $20 Star Wars miniature and elect to charge your clients a shipping price instead of the free delivery offered by Amazon.
The minimum referral fee isn’t specified.
Amazon will charge you a minimum referral fee of $0.30 if the final price of the goods you’re selling is less than $0.30.
Consider the $1.40 price tag on a soccer card from your collection. Amazon’s policy requires you to pay a minimum referral charge of $0.30, despite the fact that the usual referral price is only $0.21.
In addition, Amazon charges a minimum referral fee of $0.30 each product, regardless of the category in which it belongs.
To What Extent Do You Apply Discount and Claim Codes?
As a result, the Amazon referral fee is calculated on a percentage of the sale price rather than the entire price if you’re offering a discount to customers who use the “claim code” at checkout to get a lower price.
Suppose you’re selling a brand-new hairbrush for $30, and you’d like to describe this in more detail. In most cases, you’d be compensated with a 15% commission on the sale ($30). But if you give your consumers a 50% discount, they may pay $15 for the hairbrush by entering a claim code at the checkout.
Consequently, you’ll only have to pay a referral fee of $2.25 – 15% of the $15 transaction price.
Helium 10 and Jungle Scout are the best amazon FBA tools to start selling on Amazon.
Questions and Answers
Is a Referral Fee Due if You Return a Product?
All of this depends on the goods that you’re getting back. As long as it’s not a media product, Amazon will usually reimburse you up to 80% of the charge you paid and any additional expenses up to $5.
As a rule of thumb, when you return a media product, you’ll get your money back with no questions asked. Remember that this refund may not include the individual seller fee of $0.99.
How Do I Pay Amazon For A Referral Fee?
So you don’t have to do anything manually, Amazon automatically deducts referral money, which makes your life a whole lot easier.
Is It Legal To Pay A Commission For A Referral?
Payments are made by a product seller to third parties for referring consumers and advocating their services in exchange for referral fees. Due to the fact that many organizations and businesses use these fees as a marketing tool, they are lawful.
Is there an upward or downward trend in referral fees over time?
There is no guarantee that Amazon fees, including referral fees, will stay the same or decrease over time. At least a few months in advance, you should be notified of any changes and this may be viewed in your Amazon Seller Central account if necessary.
How Do I Prevent Amazon’s Referral Fee from Being Charged?
You can’t completely avoid the Amazon referral fee, but you may plan ahead and choose wisely which products to list on Amazon.
When selling on Amazon, many people opt to use low-referral-fee products and higher-referral-fee items on eBay or other marketplaces.